Intro­duc­tion: The title trans­lates: “Money is the sinew of war.” The pro­gram fur­ther devel­ops the topic of the geopo­lit­i­cal and macro­eco­nomic strug­gle between the dol­lar and the euro and relates it to the events of 9/11, the Iraq war and the Asian economies. Par­tic­u­lar empha­sis is on the air­line travel indus­try, the air­craft man­u­fac­tur­ing indus­try, the SARS epi­demic and the con­test between Boe­ing and the Euro­pean aero­space man­u­fac­turer EADS—the man­u­fac­turer of the Air­bus. EADS has been pres­sur­ing Boe­ing to price its prod­uct in euros, mir­ror­ing the con­test between the dol­lar and the euro evi­denced in Iraq’s pric­ing of its oil in euros. The 9/11 attacks and SARS have depressed the air­line and air­craft man­u­fac­tur­ing busi­nesses: Mr. Emory asks whether both events may be an out­growth of the Under­ground Reich’s appli­ca­tion of the con­cept of total war devel­oped by Karl Von Clause­witz. Von Clause­witz under­stood that war is waged in its totally—against all aspects of the enemy’s society—its econ­omy, its morale and its social fab­ric, as well as against the mil­i­tary forces of the oppo­nent. At the core of the dis­cus­sion is the con­cept of both the euro and the US cur­rent accounts deficit as weapons of war which will, in time (if the sit­u­a­tion is not cor­rected,) destroy the United States as effec­tively as ter­ror­ists or armies.

Pro­gram High­lights Include: the role of Asian cen­tral banks in prop­ping up Bush’s Iraq war by invest­ing in dollar-denominated issues; the pos­si­ble effect of SARS on the global econ­omy and (con­se­quently) the US cur­rent accounts deficit; the effect of SARS on the air­lines busi­ness; the effect of SARS on the air­craft man­u­fac­tur­ing busi­ness; the coin­ci­dent effects on the dol­lar and on Asian economies of SARS; the unsuc­cess­ful attempt by vet­er­ans of Project Coast to trans­fer their resid­ual BW weapons to the United States; the role of GOP heavy­weight Grover Norquist as the point man for the Repub­li­can tax-cutting plan and as the Islamist point man in the GOP; the pro­jected effects of Norquist’s tax cuts and the effects of the 9/11 attacks by his Islamist bud­dies on the US cur­rent accounts deficit; Bush’s use of counter-terror fund­ing to fur­ther his socio-economic and polit­i­cal goals.
1. Begin­ning with review of an arti­cle that was fea­tured in FTR 405, the pro­gram intro­duces the eco­nomic con­text in which the events ana­lyzed here must be con­sid­ered. The assault against the US by the Under­ground Reich and its Islam­o­fas­cist allies that Mr. Emory believes to be under way is—in its pri­mary manifestation—economic in nature. It can be argued per­sua­sively that the goal of the gam­bit of the 9/11 attacks is the destruc­tion and/or sub­ju­ga­tion of the United States. In FTR#405, Mr. Emory sug­gests that the attack, from a con­cep­tual point of view, could be viewed as a com­bi­na­tion of the Ger­man inva­sion of France in World War II, the bat­tle of Ver­dun in World War I, and Oper­a­tion Bern­hard in World War II. (For dis­cus­sion of the com­par­i­son of the Ger­man inva­sion of France in World War II to 9/11, see FTR#’s 366, 372, 395, 401.) The goal of the Ger­man high com­mand in the bat­tle of Ver­dun was to attack a posi­tion (the steel-making city of Ver­dun) that the French would not be will­ing to lose. In so doing, the Ger­mans hoped to bleed the French army dry—to inflict so many casu­al­ties that they would have to sue for peace. Oper­a­tion Bern­hard (see RFA#17—available from Spit­fire) was a Ger­man gam­bit intended to destroy the British econ­omy by forg­ing pound notes and destroy­ing the UK’s abil­ity to finance its war effort. The fol­low­ing arti­cle dis­cusses the eco­nomic aspects of the war with Iraq. Asian cen­tral banks’ sup­port of the dol­lar has—to date—made this an eas­ier enter­prise to under­take than it might have been under dif­fer­ent cir­cum­stances. This sit­u­a­tion might change should the eco­nomic land­scape be altered in a sig­nif­i­cant fash­ion. Note the US cur­rent accounts deficit. “The 19th cen­tury British polit­i­cal econ­o­mist Wal­ter Bage­hot had a pithy quote from Louis XIV on war finance. The last guinea, said the Sun King, will always win. In the case of Iraq it will be the last US dol­lar. And one of the more remark­able things about the US-led inva­sion of Iraq is just how eas­ily and cheaply the ven­ture will be financed. On the face of it, war has rarely been waged in such inaus­pi­cious finan­cial cir­cum­stances. At a time of extreme geopo­lit­i­cal uncer­tainty the pay­ments bal­ances of the world’s biggest economies are badly out of kil­ter. US house­hold sav­ings are seri­ously depleted and the deficit on the cur­rent account of the Amer­i­can bal­ance of pay­ments is close to an unprece­dented 5 per cent gross domes­tic prod­uct.”
(“The Sinews of War are Asian” by John Plen­der; Finan­cial Times; 3/21/2003; p. 17.)
2. The rel­a­tively strong posi­tion of the dol­lar (in turn result­ing from invest­ment in dollar-denominated IOU’s) stems from the rel­a­tive strength of Asian economies and their cen­tral banks’ invest­ments in the dollar.

“The US has, since the burst­ing of the stock mar­ket bub­ble, become a rel­a­tively unat­trac­tive des­ti­na­tion for for­eign pri­vate cap­i­tal. Inter­est rates are low, the dol­lar is weak and the US econ­omy will advance this year at less than its under­ly­ing trend growth rate. Yet as pri­vate cap­i­tal has fought increas­ingly shy of the world’s largest econ­omy, the cen­tral bankers have come to George W. Bush’s res­cue. Japan, China, Tai­wan, Hong Kong and Sin­ga­pore alone have accu­mu­lated offi­cial reserves worth more than $1,100bn, of which the great major­ity is invested in dollar-denominated IOU’s such as US Trea­suries. For many cen­tral banks these reserves are earn­ing much less in inter­est than they could earn back at home.”

3. If the US should become enmeshed in a costly post-war, or if the Bush administration’s plans to dras­ti­cally increase mil­i­tary spend­ing while dra­mat­i­cally slash­ing taxes on the wealthy should come to fruition, the effect on the dol­lar and the US cur­rent accounts deficit could be dis­as­trous and decisive.

“This is not, of course, a phil­an­thropic ges­ture. For Japan, with a stag­nant econ­omy, it is a mat­ter of resist­ing an appre­ci­a­tion of the yen that would hit the export sec­tor. The oth­ers main­tain a dol­lar peg, largely for rea­sons of com­pet­i­tive­ness . . . Yet it remains the case that global finance has been excep­tion­ally kind to Mr. Bush. And Louis XIV was indeed express­ing an age-old ver­ity. The Tac­i­tus ver­sion was pecu­nia nervus belli: money is the sinew of war. We should not for­get that unlim­ited money, how­ever help­ful, can­not guar­an­tee the peace.”

4. Against the back­ground of Bush’s fiscally-insane tax cut pro­pos­als, the US bud­getary sit­u­a­tion is not to be ignored. The only rea­son the US got away with the sui­ci­dal fis­cal poli­cies of the Rea­gan and Bush admin­is­tra­tions is the fact that the US was able to bor­row against the dol­lars held as reserve cur­rency. A sig­nif­i­cantly weak­ened dol­lar and exac­er­bated cur­rent accounts deficit for the US will dras­ti­cally weaken the country.

“The US government’s finances are set to head sharply into deficit and stay there ‘for the fore­see­able future,’ the White House bud­get direc­tor said yes­ter­day. Mitchell Daniels, direc­tor of the Office of Man­age­ment and Bud­get (OMB), said he expected fed­eral deficits equiv­a­lent to 2–3 per cent of gross domes­tic prod­uct for this fis­cal year and next, and could not say when the bud­get would return to surplus.”

5. The pro­gram reviews Grover Norquist’s role as pri­mary tax-slasher. In this con­text, it is impor­tant to remem­ber that he is also the point man for the Islamists in the Repub­li­can Party. Note that these Islamists’ attacks on the United States pre­cip­i­tated the national secu­rity build-up which, when com­bined with the Bush tax cuts, has led to a return to record bud­get deficits. Whether Norquist is fully con­scious of the effects of his actions is not par­tic­u­larly rel­e­vant. In FTR#327, the col­lapse of the com­modi­ties mar­ket effected by the Under­ground Reich is worth not­ing. When cou­pled with the assas­si­na­tion of JFK, it led to a huge profit for the Under­ground Reich per­pe­tra­tors of these events. Tino De Ange­lis was (appar­ently) under mind con­trol and not aware of the impli­ca­tions of his actions. The same may be true of Norquist.

“Reac­tion from advo­cates and crit­ics was swift and strong. ‘It’s a tax shel­ter for the wealthy. This is really an attempt to help the president’s friends,’ said Rep. Robert t. Mat­sui, D-Sacramento. ‘It’s unbe­liev­able.’ ‘These are the build­ing blocks of a new tax sys­tem,’ said Grover Norquist, pres­i­dent of the con­ser­v­a­tive Amer­i­cans for Tax Reform.”

6. One should note the reac­tion of some Islamists to the Iraq war. Some have called for Mus­lims to embrace the euro as opposed to the dol­lar. The issue of the dol­lar vs. the euro is at the core of the the­sis Mr. Emory has been devel­op­ing about the 9/11 attacks and their macro­eco­nomic effect on the US. The reac­tion expressed by the Mus­lim cleric in this arti­cle goes to the heart of the dis­cus­sion from past broad­casts about the Earth Island and the Under­ground Reich’s attempts at gain­ing polit­i­cal con­trol of that area’s pop­u­la­tion and effect­ing eco­nomic advan­tage as a result.

“In this sandswept Niger­ian town on the edge of the Sahara Desert, a Mus­lim cleric, dis­play­ing anger about the U.S. war in Iraq, recently exhorted his fol­low­ers to take action to inflict pain on the U.S. namely, ditch the dol­lar and embrace the euro. ‘Euro­pean Coun­tries,’ preached Sheik Ibrahim Umar Kabo, the head of Nigeria’s Coun­cil of Mus­lim Schol­ars, ‘have refused to be fooled by Amer­ica’ and sup­port the war. ‘We should there­fore encour­age trans­ac­tions with the euro and stop patron­iz­ing the Amer­i­can dol­lar.’ The sheik’s advice was met with cries of ‘Down with Amer­ica.’ The enthu­si­asm spilled out into the streets with the faith­ful shout­ing, ‘Euro yes! Dol­lar no!’”

(“Some Mus­lims Advo­cate Dump­ing the Dol­lar for the Euro” by Robert Block; The Wall Street Jour­nal; 4/15/2003; p. C1.)

7. An arti­cle not included in the orig­i­nal pro­gram notes the effect of the euro on the geopol­i­tics sur­round­ing the Franco/German oppo­si­tion to the war.

“It was the euro—not the Secu­rity Coun­cil veto—that enabled France to oppose U.S. pol­icy on Iraq so boldly. Indeed, the suc­cess of the Euro­pean cur­rency has turned it into a polit­i­cal anti-missile shield that works, and that has changed the inter­na­tional bal­ance of power. Absent the euro, it would have been rel­a­tively easy for the U.S. to qui­etly bring the French back into line. A stealth U.S. attack on the French franc, and on French finan­cial markets—more likely just the hint of it—would do the job . . . With the Cold War behind us, the key ques­tion of inter­na­tional pol­i­tics, as seen by the French polit­i­cal and admin­is­tra­tive elite, is this: Now that there is no mil­i­tary threat to Europe from the Soviet Union, or any­one else, how to con­tain the US? In this logic, the euro must become an alter­na­tive, or co-reserve cur­rency along­side the dollar.”

8. One of the major points of dis­cus­sion in this broad­cast is SARS. Is it a naturally-occurring dis­ease or is it the prod­uct of bio­log­i­cal war­fare? If the lat­ter is the case, is it pos­si­ble that SARS may be an appli­ca­tion of the Von Clause­witz con­cept of total war? Much of the pro­gram con­sid­ers the effect of SARS on the air­line indus­try, the air­craft man­u­fac­tur­ing busi­ness, and on the strength of the dollar.

“It has all the appear­ance of a per­fect storm. A vir­u­lent con­flu­ence of fac­tors has shaken the global econ­omy in recent weeks and caused com­pa­nies to put inter­na­tional busi­ness on hold. The most dis­rup­tive have been the flu­like severe acute res­pi­ra­tory syn­drome from Asia and the war in Iraq with its asso­ci­ated fear of ter­ror­ism . . . Com­pli­cat­ing the pos­si­ble long-term effects of the war is its tim­ing: The war is being fought while the U.S. econ­omy is still strug­gling. The dol­lar has fallen by 17 per­cent against the euro since early 2002, mak­ing imports from coun­tries such as Ger­many and France costly for Amer­i­cans [Empha­sis added.”

9. Con­sid­er­ing the pos­si­ble eco­nomic impact of the dis­ease, a WHO offi­cial notes the poten­tially severe impli­ca­tions of SARS.

“The SARS dis­ease poses one of the most seri­ous global health threats since Aids because of its infec­tious­ness and poten­tial to spread through air travel, the World Health Orga­ni­za­tion warned yes­ter­day. It said other dis­eases that have emerged in recent decades, such as Ebola, had higher fatal­ity rates but tended to be focused on lim­ited geo­graphic areas and were not as eas­ily passed on. ‘SARS could become the first severe new dis­ease of the 21st cen­tury with global epi­demic poten­tial,’ said Dr. David Hey­mann, exec­u­tive direc­tor of WHO’s com­mu­ni­ca­ble dis­ease programs.”

“The dis­ease has affected hotel and air­line book­ings across Asia and led econ­o­mists to revise down their fore­casts for regional growth. Dr. Hey­mann said global eco­nomic con­se­quences were already esti­mated at about US$30bn. He said the disease’s incu­ba­tion period of up to 10 days meant it could be trans­ported in symp­tom­less air trav­el­ers all over the world.”

11. Mir­ror­ing the fears of the WHO offi­cial dis­cussed above, an ana­lyst with Mor­gan Stan­ley fears the eco­nomic impact of the disease.

“With the Chi­nese now reluc­tant to travel—not just over­seas but also at home—and with Asian coun­tries restrict­ing the entry of vis­i­tors from affected areas, the SARS effect could eas­ily esca­late. Mor­gan Stan­ley has pared its 2003 esti­mate of growth in Asia (ex Japan) from 5 per cent to 4.5 per cent. This assumes a 60 per cent fall in tourism over the next three months and then a return to nor­mal. Unfor­tu­nately the SARS effect is con­cen­trated on Asia—the region of the world that we had counted on to keep the global econ­omy afloat. With this source of global resilience now being under­mined, the global econ­omy has lit­tle left to sup­port it. Had eco­nomic growth been more vig­or­ous before the out­break of SARS, this prob­a­bly would not have made such a dif­fer­ence. Sadly, that is not the case. There is far more to the story of emerg­ing global weak­ness than a SARS-related down­turn in Asia. War, and the related uncer­tain­ties are equally impor­tant fac­tors. But SARS may be the tip­ping point.”

(“Asia Sneezes and the World Catches a Cold” by Stephen Roach; Finan­cial Times; 4/14/2003; p. 15.)

12. Eco­nomic colum­nist Paul Krug­man also notes the poten­tial impact of SARS on the global and US economies.

“Seri­ous peo­ple know that germs pose a far greater threat to mankind than ter­ror­ism, and read­ers of books like William McNeill’s ‘Plagues and Peo­ples’ and Jared Diamond’s ‘Guns, Germs and Steel’ know microbes have been the down­fall of many a civ­i­liza­tion. SARS—severe acute res­pi­ra­tory syn­drome, a new virus from Guang­dong Province in China—doesn’t look like a civilization-killer, and prob­a­bly isn’t nearly as bad as the 1918–19 influenza virus. But experts fear it may be too late to pre­vent a global SARS pandemic—that is, it may be too late to stop the virus from spread­ing through­out the world. And the bug is already hav­ing major eco­nomic con­se­quences; fear of the dis­ease has par­a­lyzed much busi­ness in Hong Kong and has led to a drop in air travel worldwide.”

(“Guns, Germs and Stall?” by Paul Krug­man; The New York Times; 4/4/2003; p. A19.)

13.

“Even if SARS doesn’t become wide-spread here—and that’s not a safe bet—it can do a lot of dam­age to our own econ­omy because the world has grown so inter­de­pen­dent. Con­sider this: the most likely engine of a vig­or­ous U.S. recov­ery would be a renewed surge in tech­nol­ogy spend­ing, and Guang­dong is now the work­shop of the infor­ma­tion tech­nol­ogy world, the place where a lot of the equip­ment that we would expect busi­nesses to buy if there was an invest­ment boom—for exam­ple, com­po­nents for wire­less com­puter networks—is assem­bled. The virus is already ham­per­ing pro­duc­tion, not so much because work­ers have become sick as because Taiwan-based man­agers and engi­neers are afraid to visit their plants. The result may be to stall an invest­ment recov­ery before it starts. The war has monop­o­lized everyone’s atten­tion, includ­ing mine. But other things are hap­pen­ing, and you shouldn’t be shocked if the eco­nomic news turns awful.”

14. In addi­tion to the above lines of analy­sis, the poten­tial effect of SARS on the US cur­rent accounts deficit is at the core of econ­o­mist Mar­tin Wolf’s analysis.

“The unbal­anced pat­tern of demand has gen­er­ated the patently unsus­tain­able cur­rent accounts deficits and sur­pluses noted by [IMF econ­o­mist Ken­neth] Rogoff. The world econ­omy can­not build a strong and durable recov­ery on the profli­gacy of the English-speaking coun­tries alone. Sooner or later such a glob­ally unbal­anced recov­ery will blow up, prob­a­bly with cur­rency col­lapses. [Ital­ics are Mr. Emory’s].”

“The world is suf­fused with a mix­ture of com­pla­cency and panic—complacency over the world econ­omy and panic over secu­rity and now a new (and so far minor) dis­ease. The end of the war is an oppor­tu­nity to redress the bal­ance. It must be seized.”

16. The Under­ground Reich’s con­tri­bu­tion of soft­ware for the mass pro­duc­tion of nuclear weapons was dis­cussed at length. John Lof­tus dis­cussed intel­li­gence infor­ma­tion main­tain­ing that Iraq and North Korea had shared infor­ma­tion about nuclear tech­nol­ogy. With the inter­na­tional weapons trade cut­ting across ide­o­log­i­cal lines, is it pos­si­ble that North Korea’s nuclear capa­bil­ity may have come from the Under­ground Reich (per­haps via Iraq?) In that con­text, con­sider the pos­si­ble effect of the North Korean nuclear sit­u­a­tion on the Asian economies. Like SARS, the cri­sis may have a very dis­turb­ing out­come for the US. One should bear in mind that the Japan­ese hold roughly 15% of America’s for­eign debt. A dra­matic wors­en­ing of the sit­u­a­tion vis-a-vis North Korea could pro­duce a seri­ous down­turn in the Japan­ese stock mar­ket and a result­ing liq­uid­ity cri­sis for Japan­ese banks. Should they sell off Amer­i­can T-bills, it could col­lapse the US econ­omy, by gen­er­at­ing a rush to dump the T-bills by other investors. Pecu­nia nervus belli. (* Note that this arti­cle was not in the orig­i­nal broadcast.)

“A dif­fi­cult nego­ti­a­tion will be all the more per­ilous because, unlike Iraq, North Korea is adja­cent to advanced indus­trial economies with com­plex and pow­er­ful finan­cial mar­kets. Those economies now account for most of the world’s out­put growth. North Korea has taken hostage the pros­per­ity of the Asia Pacific region. There is less pre­mon­i­tory blus­ter and less fer­vor in Wash­ing­ton, but the North Korea cri­sis could do far more dam­age to the global econ­omy than war in Iraq.”

(“A Korean Peace may Hurt More than an Iraqi War” by John Edwards; Finan­cial Times; 4/23/2003; p. 13.)

17.

“It is true that the North Korea cri­sis is unlikely to develop like the con­flict over Iraq. The US will not invade North Korea. North Korea can­not make any claim to regional lead­er­ship. It has no strate­gic resource such as oil, and it is almost com­pletely iso­lated in global pol­i­tics. And far from want­ing to go it alone, the US is insist­ing on mul­ti­lat­eral rather than bilat­eral talks. The dis­pute will prob­a­bly be peace­fully resolved, but not with­out alarm­ing brinks­man­ship. For the economies of the Asia Pacific region, this is the real prob­lem. Through the impact of threat and counter-threat on finan­cial mar­kets and cap­i­tal flows the region could suf­fer another eco­nomic calamity with­out a shot being fired.”

18. The piv­otal con­flict between the euro and the dollar—a cen­tral behind-the-scenes aspect of the Iraq war—is at the core of the fis­cal con­test between Boe­ing and the EU-manufactured Air­bus. (For more about Air­bus and its con­nec­tions to the CDU fund­ing scan­dal and Karl-Heinz Schreiber, see FTR#194.) It is impor­tant to note that the 9/11 attacks had a huge, neg­a­tive impact on the air­line indus­try and (con­se­quently) on Boeing’s air­craft man­u­fac­tur­ing busi­ness. Bear in mind the Ger­man asso­ciates of Mohammed Atta.

“The own­ers of Air­bus, the pan-European air­craft maker, are seek­ing to per­suade their main US aero­space rival Boe­ing to adopt the euro as the bench­mark cur­rency for the tra­di­tion­ally dollar-based com­mer­cial air­craft mar­ket. The call from Philippe Camus, co-chief exec­u­tive of the Franco-German Euro­pean Aero­nau­tic Defense and Space com­pany (EADS), reflects the cost dis­ad­van­tage that Air­bus cur­rently suf­fers fol­low­ing the sus­tained depre­ci­a­tion of the dol­lar against the euro. ‘Cur­ren­cies are a fac­tor of com­pe­ti­tion and we want to force Boe­ing to adopt our cur­rency struc­ture,’ said Mr. Camus in his first inter­view since the death ear­lier this month of Jean-Luc Lagardere, the EADS co-chairman.”

19.
“How­ever, Mr. Camus’ call also has a sym­bolic edge, reflect­ing the recent change in the bal­ance of power in the civil air­craft mar­ket. Airbus—of which EADS owns 80 percent—last year claimed 54 per cent of new orders for large air­craft by units and dol­lar value, with Boe­ing tak­ing the rest. . . . A sim­i­lar shift in base cur­ren­cies was pro­posed a year and a half ago by some oil pro­duc­ing coun­tries includ­ing Iran, Libya and Rus­sia, which sug­gested that oil prices should be expressed in euros. Before the out­break of war, Iraq was already pric­ing its oil in euros. . . . A US oil indus­try ana­lyst yes­ter­day sug­gested that there would only be a case for the euro to become the ref­er­ence cur­rency for oil if it unseated the US dol­lar to become the strongest cur­rency on a last­ing basis.”
20. Again, the pres­sures of 9/11 have had a seri­ous and neg­a­tive effect on Boeing’s for­tunes. In some of Mr. Emory’s con­ver­sa­tions with Pro­fes­sor Wil­helm Stauf­fer in the early 1990s, Pro­fes­sor Stauf­fer detailed Lufthansa’s attempts at gain­ing con­trol of the air­line indus­try. Sub­si­dized by the Ger­man gov­ern­ment, Lufthansa may be in a posi­tion to gain from 9/11 and SARS. Air­bus may be in a sim­i­lar posi­tion. There is sub­stan­tive infor­ma­tion con­nect­ing 9/11 with the Under­ground Reich. Is it pos­si­ble that SARS may be an appli­ca­tion of Von Clausewitz’s con­cept of Total War to bio­log­i­cal war­fare and eco­nom­ics? Pecu­nia nervus belli.
“Boe­ing faces a crit­i­cal choice between spend­ing boldly to develop a new jet and hun­ker­ing down to play defense dur­ing the air­line industry’s worst down­turn ever. Two of the most pow­er­ful mem­bers of the company’s 11-person board are said to be rais­ing cost con­cerns about the 7E7, as they press Boe­ing to improve its earn­ings and stock price—even if that means sac­ri­fic­ing cutting-edge engi­neer­ing . . .”
(“Boe­ing, Los­ing Ground to Air­bus, Faces Key Choice” by J. Lynn Lunsford; The Wall Street Jour­nal; 4/21/2003; p. A1.)

21.

“ . . . The case for Boe­ing hedg­ing its bets has appeal dur­ing a his­toric commercial-aviation slump. But it implies a will­ing­ness to cede mar­ket share to the industry’s only other titan, Europe’s Air­bus. And the strat­egy strongly resem­bles the one McDon­nell Dou­glas employed as it sank to also-ran sta­tus in the 1990’s.”

22. As one observes the maneu­ver­ing on the inter­na­tional and eco­nomic stages, bear in mind the com­plex CDU fund­ing scan­dal that linked the French Elf oil com­pany with a com­plex series of trans­ac­tions involv­ing the Thyssen firm, Saudi Ara­bia, the Leuna refin­ery in East Ger­many. Air­bus and the mys­te­ri­ous Karl-Heinz Schreiber are at the core of this scan­dal. The Ger­man dom­i­na­tion of cor­po­rate France is another fac­tor to con­sider in the con­text of the maneu­ver­ing around the Iraq war.

“This could yet throw light on kick­backs paid by Elf over a deal between Mr. Mit­terand and Ger­man ex-chancellor Hel­mut Kohl to invest in the Leuna refin­ery in East Germany—an affair which helped bring Mr. Kohl down.”

(“French Trial Paints a Pic­ture of Graft on a Grandiose Scale” by Robert Gra­ham; Finan­cial Times; 4/22/2003; p. 14.)

23. Next, the pro­gram dis­cusses the impact of SARS on the air travel busi­ness. Will this por­tend well for Air­bus and poorly for Boeing?

“Two of Asia’s biggest air car­ri­ers, Cathay Pacific Air­ways and Sin­ga­pore Air­lines, announced deep cut­backs on Fri­day because pas­sen­gers have been scared off by a vir­u­lent res­pi­ra­tory dis­ease in the region. Cathay Pacific said that it would oper­ate 37 per­cent fewer flights than it had pre­vi­ously planned. Sin­ga­pore Air­lines said it would cut 19.7 per­cent of its flights. Both air­lines said their reduc­tions in ser­vice would last through the end of May. The fig­ures include the more mod­est reduc­tions in ser­vice announced in the past two weeks.”

25. In the con­text of the advent of SARS, it is inter­est­ing (and pos­si­bly sig­nif­i­cant) that vet­er­ans of Project Coast were recently turned down in their attempts at trans­fer­ring their inven­tory to the US. (For more about Project Coast and its con­nec­tions to Amer­i­can per­son­nel, see FTR#’s 225, 317, 324, 386.) Could the Project Coast alumni have had any­thing to do with SARS?

“Daan Goosen’s call­ing card to the FBI was a vial of bac­te­ria he had freeze-dried and hid­den inside a tooth­paste tube for secret pas­sage to the United States. From among hun­dreds of flasks in his Pre­to­ria lab, the South African sci­en­tist picked a man-made strain that was sure to impress: a micro­bial Franken­stein that fused the genes of a com­mon intesti­nal bug with DNA from the pathogen that causes the deadly ill­ness gas gan­grene. ‘This will show the Amer­i­cans what we are capa­ble of,’ Goosen said at the time.”

(“Vile Vials Live on in South Africa” by Joby War­rick and John Mintz [Wash­ing­ton Post]; San Fran­cisco Chron­i­cle; 4/20/2003; p. A16.)

26.
“On May 6, 2002, Goosen slipped the par­cel to a retired CIA offi­cer who couri­ered the microbes 8,000 miles for a drop-off with the FBI. If U.S. offi­cials liked what they saw, Goosen said he was pre­pared to offer much more: an entire col­lec­tion of pathogens devel­oped by a secret South African bio-weapons research pro­gram Goosen once headed. Goosen’s extra­or­di­nary offer to the FBI, out­lined in obtained doc­u­ments and inter­views with key par­tic­i­pants, promised scores of addi­tional vials con­tain­ing the bac­te­ria that cause anthrax, plague, sal­mo­nella and bot­u­lism, as well as anti­dotes for many of the dis­eases. Sev­eral strains had been genet­i­cally altered, a tech­nique used by weapons sci­en­tists to make dis­eases harder to detect and defeat. All were to be deliv­ered to the U.S. gov­ern­ment for safe­keep­ing and to help strengthen U.S. defenses against future ter­ror­ism attacks . . . ”
27.

“ . . . Par­tic­i­pants in the failed deal dif­fer on what hap­pened and why. But they agree that the bac­te­r­ial strains remain in pri­vate hands in South Africa, where they have con­tin­ued to attract atten­tion from indi­vid­u­als inter­ested in acquir­ing them . . .”

28. In describ­ing the efforts at mov­ing the South African BW sam­ples, Goosen makes ref­er­ence to Project Coast vet­er­ans who had been using the inven­tory for pri­vate indus­trial projects. Dr. Larry Ford’s “Inner Con­fi­dence” sup­pos­i­tory was one such project.

“ . . . South African offi­cials claimed to have destroyed all of Project Coast’s bio­log­i­cal mate­ri­als in 1993. But Goosen says many sci­en­tists kept copies of organ­isms and doc­u­ments to con­tinue work on ‘dual-use’ projects with com­mer­cial as well as mil­i­tary appli­ca­tions. Goosen’s vac­cine pro­duc­tion lab ended up with hun­dreds of strains, at least half of which were from Project Coast . . .”

(Ibid.; p. A17.)

29. Note that a Ger­man and an appar­ent Arab were among those who sought access to Project Coast’s inventory.

“ . . . In the past nine months, the sci­en­tist has been offered money by a Ger­man treasure-hunter and a man claim­ing to be an Arab Sheikh. Goosen says he turned the offers down, but wor­ries about future bioter­ror­ism. ‘A small con­tainer of pathogens could kill a mil­lion peo­ple,’ he said.”

(Ibid.; p. A17.)

30. The broad­cast con­cludes with dis­cus­sion of the dis­turb­ing use of counter-terrorism to pro­vide a dis­pro­por­tion­ately large amount of fund­ing to the peo­ple of states that voted for George Bush. Mr. Emory notes that the “blue states” are basi­cally the areas that are destroyed in the Nazi tract Serpent’s Walk. This sub­ject will be taken up at greater length in FTR#409.

“ . . . What Mr. Chait doesn’t point out is the extent to which already inad­e­quate antiter­ror­ism spend­ing has been focused on the parts of the coun­try that need it least. I’ve writ­ten before about the myth of the heartland—roughly speak­ing, the ‘red states,’ which voted for George W. Bush in the 2000 elec­tion, as opposed to the ‘blue states,’ which voted for Al Gore. The nation’s inte­rior is sup­pos­edly a place of rugged indi­vid­u­al­ists, unlike the spongers and whin­ers along the coasts. In real­ity, of course, rural states are heav­ily sub­si­dized by urban states. New Jer­sey pays about $1.50 in fed­eral taxes for every dol­lar it gets in return; Mon­tana receives about $1.75 in fed­eral spend­ing for every dol­lar it pays in taxes.”

“Any sen­si­ble pro­gram of spend­ing on home­land secu­rity would at least partly redress this bal­ance. The most nat­ural tar­gets for ter­ror­ism lie in or near great met­ro­pol­i­tan areas; surely pro­tect­ing those areas is the high­est pri­or­ity, right? Appar­ently not. Even in the first months after Sept. 11, Repub­li­can law­mak­ers made it clear that they would not sup­port any major effort to rebuild or even secure New York. And now that anti-urban prej­u­dice has taken sta­tis­ti­cal form; under the for­mula the Depart­ment of Home­land Secu­rity has adopted for hand­ing out money, it spends 7 times as much pro­tect­ing each res­i­dent of Wyoming as it does pro­tect­ing each res­i­dent of New York.”

(Ibid.; pp. 1–2.)

Discussion

2 comments for “FTR #407 Pecunia Nervus Belli”

The Vela Inci­dent (some­times referred to as the South Atlantic Flash) was an uniden­ti­fied “dou­ble flash” of light that was detected by an Amer­i­can Vela Hotel satel­lite on Sep­tem­ber 22, 1979.
Some spe­cial­ists who exam­ined the data spec­u­lated that the dou­ble flash, char­ac­ter­is­tic of a nuclear explo­sion, may have been the result of a nuclear weapons test: “The con­clu­sions of the Pres­i­den­tial panel (the Ad Hoc Panel) were reas­sur­ing, as they sug­gested that the most likely expla­na­tion of the Vela detec­tion was a mete­oroid hit­ting the satel­lite — in part because of the dis­crep­ancy in bhang­me­ter read­ings. Oth­ers who exam­ined the data, includ­ing Defense Intel­li­gence Agency (DIA), the national lab­o­ra­to­ries, and defense con­trac­tors reached a very dif­fer­ent con­clu­sion — that the data sup­ported the con­clu­sion that on 22 Sep­tem­ber 1979, Vela 6911 had detected a nuclear detonation.“[1][2]

[ ... ]

The “dou­ble flash” was detected on Sep­tem­ber 22, 1979, at 00:53 GMT, by the Amer­i­can Vela Hotel satel­lite 6911, which car­ried var­i­ous sen­sors that had been designed specif­i­cally to detect nuclear explo­sions. In addi­tion to being able to detect gamma rays, x-rays, and neu­trons, the satel­lite also con­tained two sil­i­con solid-state bhang­me­ter sen­sors that would be able to detect the dual light flashes asso­ci­ated with a nuclear explosion—to be spe­cific the ini­tial brief, intense flash, fol­lowed by the sec­ond longer flash.[2]
The satel­lite reported the char­ac­ter­is­tic dou­ble flash of an atmos­pheric nuclear explo­sion of two to three kilo­tons, in the Indian Ocean between The Crozet Islands (a very small, sparsely inhab­ited French pos­ses­sion) and the Prince Edward Islands which belong to South Africa at 47°S 40°ECoordinates: 47°S 40°E.

[ ... ]

In Feb­ru­ary 1994, Com­modore Dieter Ger­hardt, a con­victed Soviet spy and the com­man­der of South Africa’s Simon’s Town naval base at the time, talked about the inci­dent upon his release from prison. He said:
Although I was not directly involved in plan­ning or car­ry­ing out the oper­a­tion, I learned unof­fi­cially that the flash was pro­duced by an Israeli-South African test, code-named Oper­a­tion Phoenix. The explo­sion was clean and was not sup­posed to be detected. But they were not as smart as they thought, and the weather changed – so the Amer­i­cans were able to pick it up.[29]

April 20, 1997, the Israeli daily news­pa­per Haaretz quoted the South African Deputy For­eign Min­is­ter, Aziz Pahad, as sup­pos­edly con­firm­ing that the “dou­ble flash” from over the Indian Ocean was indeed from a South African nuclear test. Haaretz also cited past reports that Israel had pur­chased 550 tons of ura­nium from South Africa for its own nuclear plant in Dimona. In exchange, Israel allegedly sup­plied South Africa with nuclear weapons design infor­ma­tion and nuclear mate­ri­als to increase the power of nuclear warheads.[30] This state­ment was con­firmed by the United States Embassy in Pre­to­ria, South Africa,[16][31] but Pahad’s press sec­re­tary stated that Pahad had said only that “there was a strong rumor that a test had taken place, and that it should be inves­ti­gated”. In other words – he was merely repeat­ing rumors that had been cir­cu­lat­ing for years.[32][33]

In Octo­ber 1999, a white paper that was pub­lished by the U.S. Sen­ate Repub­li­can Pol­icy Com­mit­tee in oppo­si­tion to the Com­pre­hen­sive Test Ban Treaty stated:
There remains uncer­tainty about whether the South Atlantic flash in Sep­tem­ber 1979 recorded by opti­cal sen­sors on the U.S. Vela satel­lite was a nuclear det­o­na­tion and, if so, to whom it belonged.[34]
In his 2006 book On the Brink, the retired C.I.A. clan­des­tine ser­vice offi­cer, Tyler Drumheller, wrote of his 1983–88 tour-of-duty in South Africa:
We had oper­a­tional suc­cesses, most impor­tantly regard­ing Pretoria’s nuclear capa­bil­ity. My sources col­lec­tively pro­vided incon­tro­vert­ible evi­dence that the apartheid gov­ern­ment had in fact tested a nuclear bomb in the South Atlantic in 1979, and that they had devel­oped a deliv­ery sys­tem with assis­tance from the Israelis.

@R. Wil­son: I’ve heard of this as well. Why was this so heav­ily con­cealed, and if South Africa man­aged to build more nukes, where have they gone since the end of 1994? Makes you won­der, doesn’t it?